New FAQs on PPP Loan Forgiveness issued by SBA
The PPP loan program expired on August 8 and it remains to be seen whether it will be revived. For those businesses that received a PPP loan, the SBA, on August 11, issued 23 new frequently asked questions (FAQs) to help borrowers understand what comes next. All of the FAQs regarding “General Loan Forgiveness,” “Loan Forgiveness Payroll Costs,” “Loan Forgiveness Nonpayroll Costs,” and “Loan Forgiveness Reduction” are located here.
Here are some highlights:
General Loan Forgiveness FAQS:
Q&A No. 3 clarifies that borrowers don’t need to make any loan payments until the SBA has remitted the loan forgiveness amount to the lender.
Loan Forgiveness Payroll Costs FAQs:
Q&A No. 1 confirms payroll costs paid on or before the next regular payroll date after the Covered Period are eligible for loan forgiveness.
Q&A No. 2 confirms payroll costs incurred before the Covered Period but paid during the Covered Period are eligible for loan forgiveness.
Q&A No. 4 clarifies that the gross amount of cash compensation should be used when calculating cash compensation.
Q&A No. 5 clarifies that all forms of cash compensation, including commissions and bonuses, are considered payroll costs.
Q&As Nos. 6 and 7 explain what group healthcare benefit payments and retirement benefits are eligible for loan forgiveness.
Q&A No. 8 explains how much owner compensation is eligible for loan forgiveness.
Loan Forgiveness Nonpayroll Costs FAQs
Q&A No. 1 confirms nonpayroll costs incurred prior to the Covered Period, but paid during the Covered Period, are eligible for loan forgiveness.
Q&A No. 4 notes that interest on unsecured credit isn’t eligible for loan forgiveness.
Q&A No. 5 explains that payments made on recently renewed leases or interest payments on refinanced mortgage loans are eligible for loan forgiveness if the original lease or mortgage existed prior to February 15, 2020.